Organisation Design 101 - Best Practice – PowerPoint PPT Template

This presentation, "Organisation Design 101 - Best Practice," delivers insights into effective organization design principles, aligning with the quality standards of McKinsey, Bain, or BCG (consulting-grade; not affiliated). It provides a structured approach for corporate executives and consultants to develop, implement, and optimize organizational structures that align with strategic goals. Users will gain the ability to articulate key success factors, design vertical and horizontal processes, and utilize supporting tools for effective implementation.

•  Corporate executives overseeing organizational strategy and design
•  Integration leaders managing structural changes within divisions or groups
•  Consultants advising on organizational effectiveness and design
•  HR leaders focused on aligning people and processes with strategic objectives

Best-fit moments to use this deck:
•  During strategic planning sessions to align organizational structure with business goals
•  When initiating a redesign of existing organizational frameworks
•  In workshops aimed at enhancing cross-functional collaboration and decision-making processes

•  Define organization design in relation to people, strategy, and structure
•  Build a comprehensive organizational structure that supports strategic objectives
•  Establish key success factors for effective organization design
•  Analyze business diversity to inform structural decisions
•  Design vertical structures that facilitate accountability and decision-making
•  Implement horizontal processes that enhance flexibility and responsiveness

•  Objectives (page 3)
•  Attributes of an Organisation (page 4)
•  Organisational Structure (page 5)
•  Key Success Factors (page 6)
•  Design Process (page 7)
•  Develop Strategy (page 8)
•  Design Vertical Structures (page 9)
•  Design Horizontal Processes (page 10)
•  Appendix: Organisational Structure Palate (page 11)

•  Objectives - This section outlines the goals of the presentation, focusing on organization design and its relationship with other organizational attributes.
•  Attributes of an Organisation - Discusses shared values, vision, strategy, structure, people, systems, and style as foundational elements of an organization.
•  Organisational Structure - Explains how an organization’s structure aligns its attributes to execute strategy and achieve vision.
•  Key Success Factors - Identifies critical elements for successful organization design, emphasizing alignment with strategy.
•  Design Process - Details the steps for developing a strategy and designing both vertical and horizontal structures.
•  Business Definition - Explores how to assess business diversity and define the appropriate organizational structure.

•  Business Definition template for assessing organizational capabilities
•  RAID analysis framework for decision-making roles and responsibilities
•  Organizational structure palate for visualizing different structural types
•  Vertical structure design criteria checklist for prioritizing design elements
•  Horizontal process mapping tools for enhancing cross-functional collaboration
•  Implementation roadmap for tracking design changes and outcomes

•  Overview of organizational attributes and their interconnections
•  Key success factors for effective organization design
•  Business diversity analysis matrix for determining structural needs
•  RAID analysis grid illustrating decision-making roles
•  Organizational structure palate showcasing various design types

Introduction to Organization Design (30 minutes)
•  Overview of objectives and key concepts
•  Discussion on the importance of aligning design with strategy

Vertical and Horizontal Structures (60 minutes)
•  Breakout sessions to design vertical structures
•  Group discussions on horizontal processes and their implementation

Key Success Factors and Tools (45 minutes)
•  Presentation on critical success factors
•  Hands-on activity using RAID analysis and business definition templates

•  Tailor the organizational structure palate to reflect specific client needs and contexts
•  Adjust the RAID analysis framework to align with existing decision-making processes
•  Modify design criteria based on the unique attributes of the organization

•  The relationship between organizational culture and design
•  Strategies for effective communication during redesign processes
•  The impact of technology on organizational structure
•  Best practices for managing change during implementation

What are the core elements of organisation design and how do they interact?

Organisation design links an organisation’s people, strategy, structure, systems, style, shared values, and core capabilities so the structure supports strategic goals and behaviours. The presentation explains how these attributes interconnect to produce coherent design choices and uses visual aids such as the organisational structure palate.

How do vertical and horizontal structures differ and when should each be used?

Vertical structures define hierarchy, reporting lines, accountability, and decision-making clarity; horizontal structures define cross-functional processes that improve responsiveness and collaboration. The toolkit guides selection and creation using a vertical structure design criteria checklist and horizontal process mapping tools to choose between them.

How should I assess business diversity to choose an organisational structure?

Assess diversity across customer segments, product lines, and markets to decide whether to consolidate or separate functions based on shared customers, costs, and competencies. The deck includes a business diversity analysis matrix and a Business Definition template to support that assessment.

What should I look for when buying an organisation design PPT or toolkit?

Look for clear linkage between structure and strategy, practical diagnostic tools (business definition, RAID), visual options for structure types, process-mapping templates, and an implementation roadmap so teams can run workshops and track changes; Flevy’s Organisation Design 101 - Best Practice lists these specific tools and templates.

How long should an organisation design workshop run and what agenda items are typical?

A sample workshop agenda in the deck includes a 30-minute introduction to objectives and concepts, 60 minutes on vertical and horizontal structures with breakout sessions, and 45 minutes on key success factors and tool application — a 135-minute sample agenda.

After a merger, what steps should I follow to redesign the combined organisation?

Start with a business definition and diversity assessment, define strategy for the combined entity, select structure types with the organisational structure palate, clarify decision rights using RAID analysis, design horizontal processes, and track changes with an implementation roadmap; these steps are outlined in Flevy’s Organisation Design 101 - Best Practice.

How can I clarify decision rights and accountability during a redesign?

Use a RAID analysis framework to specify who Recommends, Agrees, provides Input, and Decides for key decisions, document the grid for each process or role, and align reporting lines with those rights; the approach centres on a RAID analysis grid to clarify responsibilities.

Are templates and checklists worth the cost compared to building tools from scratch?

Templates consolidate common diagnostics and design steps—business definition, RAID grids, structure palate, process maps, and implementation roadmaps—so teams can apply consistent assessments and run workshops more efficiently; the author describes tools like the Business Definition template as essential for identifying horizontal processes.

These are questions addressed within this presentation.

What is organization design?
Organization design is the process of aligning an organization’s structure with its strategy and objectives to enhance effectiveness and efficiency.

How do I determine the right structure for my organization?
Assess the diversity of your business, including customer segments, product lines, and market needs, to inform the selection of an appropriate organizational structure.

What are the key success factors in organization design?
Key success factors include alignment with strategy, clarity in decision-making processes, and effective communication of design changes.

What tools can assist in the organization design process?
Tools such as RAID analysis, business definition templates, and organizational structure palates can facilitate effective design and implementation.

How can I ensure successful implementation of a new organizational design?
Communicate the reasons for the redesign, provide adequate support and resources, and allow time for the new structure to be fully implemented and tested.

What are vertical and horizontal structures in organization design?
Vertical structures refer to the hierarchy and reporting relationships within an organization, while horizontal structures facilitate cross-functional collaboration and decision-making.

How does business diversity impact organization design?
Understanding business diversity helps determine whether to consolidate or separate functions based on shared customers, costs, and competencies.

What is the RAID analysis framework?
RAID analysis is a tool used to clarify roles and responsibilities in decision-making processes, ensuring accountability and effective collaboration.

•  Organization Design - The process of structuring an organization to align with its strategy and objectives.
•  Vertical Structure - The hierarchy of reporting relationships within an organization.
•  Horizontal Processes - Processes that occur across different functions to facilitate collaboration and decision-making.
•  RAID Analysis - A framework for defining roles in decision-making processes: Recommend, Agree, Input, Decide.
•  Business Diversity - The variety of products, services, and customer segments within an organization.
•  Key Success Factors - Critical elements that contribute to the successful design and implementation of organizational structures.
•  Organizational Structure Palate - A visual representation of various organizational structures for design reference.
•  Decision-Making Processes - Procedures through which decisions are made within an organization.
•  Shared Values - The core beliefs and principles that guide an organization’s culture and behavior.
•  Strategic Alignment - The process of ensuring that organizational structure and processes support strategic goals.
•  Implementation Roadmap - A plan outlining the steps and timelines for implementing organizational design changes.
•  Cross-Functional Collaboration - Cooperation between different departments or functions within an organization.

This PPT slide template outlines 5 organizational structure types: Functional, Product, Market, Geographical, and Process. The Functional structure focuses on activities like sales or R&D, suitable for smaller organizations or single product lines. The Product structure organizes by product lines for efficiency, emphasizing product-focused strategies in multi-product environments. The Market structure adapts to specific customer segments, enabling rapid response to market dynamics. The Geographical structure organizes operations based on regions, leveraging local advantages during expansion. The Process structure prioritizes workflows over traditional hierarchies, streamlining operations and reducing cycle times, appealing to innovative organizations.

An effective organizational structure aligns key elements such as people, core capabilities, systems, shared values, and style to execute strategy and realize vision. It serves as a central coordinating mechanism that integrates these components, ensuring cohesive operations. The structure coordinates interactions among these elements, requiring alignment between people and core capabilities for successful strategy execution. Additionally, it reflects the organization's shared values and style, indicating the importance of cultural aspects in functionality. The arrows labeled "coordinates" and "reflects" illustrate the dynamic relationship between organizational structure and these elements, emphasizing its role as both a facilitator and a mirror of the company's ethos. A well-defined organizational structure is a strategic asset that drives performance and fosters harmony towards common objectives, guiding leaders in organizational design and alignment decisions.

This PPT slide template outlines a framework for classifying distinct businesses within an organization based on shared attributes among customers, costs, competitors, and competencies. When businesses share these characteristics, they can be classified as "One business." Conversely, differing attributes suggest they should be treated as "Separate businesses." The degree of shared characteristics influences business segment classification. Understanding whether segments should operate as a single entity or separately is critical for strategic decisions, particularly in mergers, acquisitions, or market entry strategies. Defining business segments also helps identify profitability drivers within an industry, serving as a foundation for strategic analysis and informed decision-making.

This PPT slide template presents the "Principles of Functional Alignment" framework for optimizing organizational structures. It features a matrix with 2 axes: potential to combine functions and skill competency. The vertical axis ranges from "High" to "Low" for process and value chain sharing, while the horizontal axis indicates skill competency. The matrix creates 4 quadrants: 1. High potential to combine functions with high skill competency, suggesting significant benefits from integration. 2. High potential to combine functions with low skill competency, indicating caution due to skill gaps. 3. Maintain separate functions with high skill competency, emphasizing the need for specialized skills. 4. Maintain separate functions with low skill competency to avoid inefficiencies. Key insights include maximizing value through alignment, customer focus, best practice sharing, and cost management within risk constraints.

This PPT slide template presents a framework for defining business units based on cost sharing and customer sharing, key factors in determining the optimal number of businesses within an organization. The matrix is divided into 4 quadrants representing different strategic positions regarding cost sharing and market differentiation. The upper left quadrant indicates that high customer sharing can lead to differentiation or niche positioning. The adjacent quadrant highlights the potential for cost leadership through separate businesses for cost efficiency. The lower half introduces separate businesses that can operate independently or bundle offerings while sharing resources. The right side discusses substitution, where a single business offers alternative products to meet similar customer needs. An exercise prompts participants to categorize various businesses within the matrix, fostering critical thinking about product positioning within this strategic framework.

This PPT slide template outlines a structured approach to organizational design, focusing on alignment with strategic objectives. It includes 3 components: developing strategy, designing vertical structures, and designing horizontal processes. "Develop strategy" emphasizes formulating a "winning strategy" based on market conditions and organizational capabilities, typically during the annual strategy planning cycle. "Design vertical structures" analyzes internal diversity, considering single versus multiple products or services, and prioritizes key design criteria to determine suitable departmental structures. "Design horizontal processes" integrates lateral processes into the vertical structure, fostering information sharing, enhancing decision-making, and ensuring organizational flexibility. This interconnected framework supports agility and responsiveness, aligning design processes with strategic goals.

The RAID analysis framework defines roles in decision-making with 4 categories: Recommend, Agree, Input, and Decide. The "Recommend" role is responsible for proposals, accounting for approximately 80% of the decision-making process. The "Agree" role can sign off on proposals, but only intervenes in exceptional cases, requiring resolution by the primary decision-maker, thus ensuring accountability. The "Input" category includes individuals providing consultation, expected to challenge decisions and enhance the process by incorporating diverse perspectives. The "Decide" role is held by the formal decision-maker, who resolves conflicts and manages staff, emphasizing the importance of authority and time commitment. The RAID framework clarifies decision-making roles, enhancing organizational efficiency and responsibility.

This PPT slide template outlines 5 organizational structure types: Functional, Product, Market, Geographical, and Process. The Functional structure focuses on activities like sales or R&D, suitable for smaller organizations or single product lines. The Product structure organizes by product lines for efficiency, emphasizing product-focused strategies in multi-product environments. The Market structure adapts to specific customer segments, enabling rapid response to market dynamics. The Geographical structure organizes operations based on regions, leveraging local advantages during expansion. The Process structure prioritizes workflows over traditional hierarchies, streamlining operations and reducing cycle times, appealing to innovative organizations.

An effective organizational structure aligns key elements such as people, core capabilities, systems, shared values, and style to execute strategy and realize vision. It serves as a central coordinating mechanism that integrates these components, ensuring cohesive operations. The structure coordinates interactions among these elements, requiring alignment between people and core capabilities for successful strategy execution. Additionally, it reflects the organization's shared values and style, indicating the importance of cultural aspects in functionality. The arrows labeled "coordinates" and "reflects" illustrate the dynamic relationship between organizational structure and these elements, emphasizing its role as both a facilitator and a mirror of the company's ethos. A well-defined organizational structure is a strategic asset that drives performance and fosters harmony towards common objectives, guiding leaders in organizational design and alignment decisions.

This PPT slide template outlines a framework for classifying distinct businesses within an organization based on shared attributes among customers, costs, competitors, and competencies. When businesses share these characteristics, they can be classified as "One business." Conversely, differing attributes suggest they should be treated as "Separate businesses." The degree of shared characteristics influences business segment classification. Understanding whether segments should operate as a single entity or separately is critical for strategic decisions, particularly in mergers, acquisitions, or market entry strategies. Defining business segments also helps identify profitability drivers within an industry, serving as a foundation for strategic analysis and informed decision-making.

This PPT slide template presents the "Principles of Functional Alignment" framework for optimizing organizational structures. It features a matrix with 2 axes: potential to combine functions and skill competency. The vertical axis ranges from "High" to "Low" for process and value chain sharing, while the horizontal axis indicates skill competency. The matrix creates 4 quadrants: 1. High potential to combine functions with high skill competency, suggesting significant benefits from integration. 2. High potential to combine functions with low skill competency, indicating caution due to skill gaps. 3. Maintain separate functions with high skill competency, emphasizing the need for specialized skills. 4. Maintain separate functions with low skill competency to avoid inefficiencies. Key insights include maximizing value through alignment, customer focus, best practice sharing, and cost management within risk constraints.

This PPT slide template presents a framework for defining business units based on cost sharing and customer sharing, key factors in determining the optimal number of businesses within an organization. The matrix is divided into 4 quadrants representing different strategic positions regarding cost sharing and market differentiation. The upper left quadrant indicates that high customer sharing can lead to differentiation or niche positioning. The adjacent quadrant highlights the potential for cost leadership through separate businesses for cost efficiency. The lower half introduces separate businesses that can operate independently or bundle offerings while sharing resources. The right side discusses substitution, where a single business offers alternative products to meet similar customer needs. An exercise prompts participants to categorize various businesses within the matrix, fostering critical thinking about product positioning within this strategic framework.

This PPT slide template outlines a structured approach to organizational design, focusing on alignment with strategic objectives. It includes 3 components: developing strategy, designing vertical structures, and designing horizontal processes. "Develop strategy" emphasizes formulating a "winning strategy" based on market conditions and organizational capabilities, typically during the annual strategy planning cycle. "Design vertical structures" analyzes internal diversity, considering single versus multiple products or services, and prioritizes key design criteria to determine suitable departmental structures. "Design horizontal processes" integrates lateral processes into the vertical structure, fostering information sharing, enhancing decision-making, and ensuring organizational flexibility. This interconnected framework supports agility and responsiveness, aligning design processes with strategic goals.

The RAID analysis framework defines roles in decision-making with 4 categories: Recommend, Agree, Input, and Decide. The "Recommend" role is responsible for proposals, accounting for approximately 80% of the decision-making process. The "Agree" role can sign off on proposals, but only intervenes in exceptional cases, requiring resolution by the primary decision-maker, thus ensuring accountability. The "Input" category includes individuals providing consultation, expected to challenge decisions and enhance the process by incorporating diverse perspectives. The "Decide" role is held by the formal decision-maker, who resolves conflicts and manages staff, emphasizing the importance of authority and time commitment. The RAID framework clarifies decision-making roles, enhancing organizational efficiency and responsibility.